NNPCL Board and Staff Costs Jump in 2024, Fueling Scrutiny of Rising Administrative Expenses
Fresh details from the Nigerian National Petroleum Company Limited’s (NNPCL) audited 2024 financial statements have highlighted a sharp increase in the cost of running the company’s board and workforce, intensifying public debate about governance expenses at the national oil company amid broader economic pressures.
An analysis of the 2024 Annual Report shows that directors’ fees and reimbursable expenses rose to N4.096bn in 2024, representing an increase of about 58 per cent from the N2.593bn recorded in 2023. The figure also marks a more than threefold jump from the N824m paid in 2022, reflecting a 214 per cent rise over two years.
According to the report, the higher board costs were partly driven by stability in board composition throughout the year. All 11 directors served for the full 2024 financial year, with no changes recorded until April 2025, when President Bola Tinubu dissolved the board and appointed a new leadership.
During 2024, the board was chaired by Chief Dr Pius O. Akinyelure, with Mallam Mele Kolo Kyari serving as Group Chief Executive Officer. Alhaji Umar Isa Ajiya held the position of Group Chief Financial Officer until November 2024, ahead of the appointment of Mr Adedapo Segun, who later joined the board. Other non-executive directors included Amb. Nicholas Agbo Ella, Mr Okokon Ekanem Udo, Mr Ledum Mitee, Mr Musa Tumsah, Dr Ibraheem Ghali-Mohammed, Prof Almustapha Aliyu, Mr David Ogbodo, and Mrs Eunice Thomas. Many of their tenures ended on April 2, 2025, following the reconstitution of the board under new leadership led by Engr. Ahmadu Musa Kida as chairman and Engr. Bashir Bayo Ojulari as Group CEO.
While board-related expenses climbed sharply, total compensation paid to key management personnel declined slightly in 2024. The report shows that short-term employee benefits for top executives increased to N985m from N818m in 2023, but post-employment pension and medical benefits fell significantly to N380m from N631m. Overall, total compensation for key management personnel stood at N1.365bn in 2024, down from N1.449bn a year earlier. NNPCL noted that these figures cover only key management staff, including the Group CEO, CFO, General Counsel, Company Secretary, and Executive Vice Presidents.
Beyond the boardroom, staff-related costs expanded substantially. Total employee benefit expenses at the Group level rose to N749.7bn in 2024, up from N581.8bn in 2023. At the company level, employee benefit expenses were put at N192.3bn.
The breakdown of workforce spending shows N272.7bn spent on salaries and wages, N79.1bn on staff allowances, and N40.5bn on welfare-related expenses. Pension contributions under the defined contribution scheme stood at N44bn, while gratuity charges increased to N84.4bn. Post-employment medical benefits amounted to N3.3bn, with long-term employee benefits recorded at N4.4bn.
Notably, NNPCL reported zero voluntary resignations across all age brackets in 2024, marking the second consecutive year without staff resignations. All staff exits during the year were due to mandatory retirement between the ages of 60 and 65, mirroring the pattern observed in 2023. The company linked this trend to improved welfare packages and enhanced compensation structures following its transition into a limited liability company under the Petroleum Industry Act (PIA) in 2021.
The rise in board and staff costs formed part of a broader surge in administrative expenses. General and administrative expenses at the Group level jumped to N3.58tn in 2024, up from N2.09tn in 2023. At the company level, such expenses increased to N1.66tn from N994.08bn the previous year.
Several cost lines recorded sharp increases. Depreciation of other property, plant, and equipment surged to N623.41bn from N101.03bn in 2023, while depreciation of right-of-use assets rose to N66.5bn from N13.93bn. Professional and consultancy fees expanded significantly, reaching N699.67bn at the Group level, compared with N184.2bn a year earlier. At the company level, consultancy expenses climbed to N544.17bn from N81.64bn.
Spending on software licences and maintenance rose to N210.06bn from N66.59bn, while security expenses increased to N271.37bn from N170.7bn, reflecting ongoing security challenges across oil and gas operations. Transport and travelling expenses doubled to N91.55bn, training and recruitment costs rose to N90.39bn from N48.95bn, and entertainment expenses increased to N30.34bn from N7.44bn. Local community development spending also grew to N29.89bn from N6.87bn.
The company disclosed N27.76bn in disbursements under the Host Community Development Fund, as required by the PIA, alongside N27.4bn in fuel and lubricants expenses. It also recorded N118.78bn in fines and penalties, an expense line absent in the prior year’s comparative figures. Audit fees rose modestly to N3.16bn from N2.68bn.
On the asset side, NNPCL reported impairments of N98.07bn on assets held for sale, N16.75bn written off as intangible assets, and N633m in amortisation of intangible assets. Despite the broad rise in costs, other expenses declined sharply to N146.87bn from N563.74bn in 2023, suggesting some tightening or reclassification of spending.
The sharp increase in governance, staff, and administrative costs is expected to intensify scrutiny of NNPCL’s cost structure, particularly at a time of economic strain, fuel subsidy removal, and heightened public sensitivity to public-sector spending. While supporters of the company’s commercialisation argue that competitive remuneration is necessary to attract and retain skilled professionals, critics continue to question whether rising administrative and board costs align with value-for-money expectations in Nigeria’s reformed national oil company.